roadshow presentation –q1 key sales figures 2017/18€¦ · outlook current market environment...

Roadshow presentation – Q1 Key Sales figures 2017/18

January 2018

� BC at a glance

� Highlights Q1 2017/18

� Strategy & Outlook

Agenda

January 2018 Q1 2017/18 Roadshow Presentation

January 2018

BC at a glance

� A merger between Cacao Barry, the very first French

chocolate connaisseur since 1842 and Callebaut a Belgian

chocolate couverture manufacturer expert since 1911

� Listed on the SIX Swiss Exchange since 1998

� Today, the world's leading manufacturer of high-quality

chocolate and cocoa products

� Barry Callebaut is inside 25% of all consumer products

containing cocoa or chocolate

Who are we?

The heart and engine of the chocolate industry


What do we do?

We are present in the key parts of the cocoa and chocolate value chain


FY 2016/17


What do we offer?

A broad offering from standard to the most premium products

Food Manufacturers Gourmet & SpecialtiesCocoa Products


Sales Volume per Product GroupSales Volume per Region

Our Regional and Product split

FY 2016/17 Sales Volume: 1.9 million tonnes

How are we organized?

Asia Pacific

5%

Europe

45%

Americas

27%

Global Cocoa

23%

Cocoa

Products

23%

Gourmet &

Specialities

12%

Food Manu-

facturers

65%

Sales Revenue: CHF 6,805.2 mio.

EBITDA: CHF 638.1 mio.

EBIT: CHF 488.2 mio.


Food Manufacturers

Cocoa Products

Gourmet & Specialties

Our business model

Customers Pricing model

• Small, medium and Global Food Manufacturers

• Cost Plus

• Small, medium and Global Food Manufacturers

• Market prices• Cost Plus (partly)

Profit levers

• Customer mix• Product mix• Economies of scale

• Global set-up• Combined ratio• Customer/product mix

• Professional users, Food Chains, Distributors

• Price list • Expansion of global brands• Adjacent products• Innovation/Sustainability

65%

12%

23%

Note: Percentage of FY2015/16 Group sales volume

Passing on the cost of raw materials to customers underpins profit stability by mitigating volatility impact of main raw materials

We apply a cost plus approach to the majority of the business


Chocolate factory

Cocoa processing factory

Integrated factory

A global footprint and a local service: 55 factories worldwide

Cocoa factories in origin countries and chocolate factories close to our customers


Where are we present?

Highlights Q1 2017/18

January 2018

� Sales volume up +8.0%

� Broad-based growth supported by all Regions and Product

Groups

� All key growth drivers contributed to outperform the market

(+3.1%)1

� Sales revenue reached CHF 1,872.2 million, a slight decline

of -0.7%, mainly due to lower cocoa and raw mat. prices

� Mid-term guidance confirmed

3-Month Key Sales Figures 2017/18

Strong start to the year

1 Nielsen chocolate confectionery in volume – 25 countries - Aug 2017 – Oct 2017


8,345

23,097

3,868

Region EMEA

+10.3%

Group

Q1 2016/17

-0.4%

492,931

Group

Q1 2017/18

+8.0%

532,165

Global Cocoa

+7.4%

Region Asia Pacific

+17.4%3,924

Region Americas

+2.9%

Strong start to the year across all Regions

Market

Volume

growth*

-2.3% +3.6%

*Source: Nielsen chocolate confectionery in volume – 25 countries

+1.3% +4.8%

+3.1%

Quarterly volume evolution

Quarterly volume growth vs prior year

(in Tonnes)


-0.8%

Q1 16/17

-0.4%-23.2%

Q3 15/16

+3.8%

+8.1%

-7.9%

+5.5%

+7.2%

Q2 16/17

+0.3%

Q4 16/17

+9.2%+9.0%

Q1 17/18

+8.25

+6.4%

+9.7%

-2.0%

Q2 15/16

+2.3%

+9.1%

+12.6%

Q1 15/16

+8.0%

+2.3%

-8.6%

Q4 15/16

-13.7%

+4.6%

Q3 16/17

+7.4%

+3.5%

+4.9%

-3.5% Global Cocoa

Chocolate (FM and Gourmet & Spec.)

Strong start to the year in Cocoa and Chocolate Product Groups

Market

Volume

growth*

-3.7% -1.3% -0.7% -1.5%

*Source: Nielsen chocolate confectionery in volume – 25 countries

-2.3% -1.4% +2.3%

+2.2%

FY growth 15/16

+2.2%

FY growth 16/17

+4.4%

Quarterly volume evolution

Quarterly volume growth vs prior year


+3.1%

Q1 2017/18

Volume increase supported by all our key growth drivers

+9.0%

+11.1%

Key growth

drivers

to coutperform the

market

Emerging markets

Long-term

outsourcing

& strategic

partnerships

Gourmet &

Specialties+8.9%

Volume growth vs prior year

32.5%

35.1%

12.2%


Cocoa processing profitability

European combined ratio - 6 months forward ratio

For cocoa processors, profitability depends on the ratio between input costs (price of cocoa beans) and combined output prices (price of cocoa butter and powder).

Combined ratio

3.7

Butter ratio

Powder ratio

Combined ratio remains favorable, driven by butter demand and lower

cocoa bean prices


0.00

1.00

2.00

3.00

4.00

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Lower raw material prices, with continued volatility

Raw materials price evolution

Cocoa beans

-25.0%

Milk powder

-24.1%

Sugar EU

-14.2%

Sugar world

-25.1%%

Q1 average increase

vs. prior year

January 2018

Note: All figures are indexed to Sep 2007

Source: Cocoa beans London (2nd position) in CHF/tonne, Sugar world London n°5 (2nd position), Sugar EU Kingsman estimates W-Europe DDP, skimmed milk powder average price

Germany, Netherlands, France.

Q1 2017/18 Roadshow Presentation

0%

50%

100%

150%

200%

250%

300%

Dec/2007 Dec/2008 Dec/2009 Dec/2010 Dec/2011 Dec/2012 Dec/2013 Dec/2014 Dec/2015 Dec/2016 Dec/2017

January 2018

Strategy & Outlook

Our long-term strategy remains unchanged

Vision

4 strategic

pillars

Expansion

Innovation

Cost Leadership

Sustainability

“Heart and engine of the

chocolate and cocoa industry”

‘Smart

Growth’

Sustainable growth

Margin accretive growth

Accelerated growth in Gourmet,

Specialties and emerging

markets

Return on Capital and greater

focus on Free cash flow

Talent & Team


Acquisition of D’Orsogna Dolciaria

� Leading Italian supplier of decoration and inclusion solutions for ice-

cream, dairy and bakery products in Europe

� Sales volume in 2016: 12,000 tonnes. Sales revenues of approx.

EUR 52 million

� Transaction closed on Oct 5, 2017

Acquisition of Gertrude Hawk Ingredients

� Family-owned U.S. company. New and innovative technology to

make ice cream and baking inclusions

� Sales volume in 2016/17: 13,000 tonnes. Sales revenues of approx.

EUR 70 million (USD 83 million)

� Closing expected by end of December 2017

Expansion

Recent acquisitions underline focus on value-adding products (Specialties)


January 2018

� A renewed Senior Leadership

� Combining continuity and adding new skills

� Preparing Talent for the Future

� Systematic accelerated succession planning

� Learning and Development as a business focus

� A Diverse Talent pool

� Reflecting society’s trends and customers‘ needs

� An attractive workplace for Millennials

� Focus on growing talent from origin /emerging countries

� Unified culture

� Forever Chocolate playing to BC core values

Talent & Teams

Unleashing the power of our People


Our focus areas in FY 2017/18

January 2018

� Grow Competitively

� Expanding in emerging markets and drive long-term outsourcing

agrements

� Greater focus on digital: e-commerce and customer portal

� Leading on innovation

� Grow Sustainably

� Scaling Forever Chocolate

� Invest in production capacity to cater for customer needs

� Strengthening capabilities

� Develop talents

� Grow Profitably

� Driving leverage by maintaining an optimized cost base

� Expanding our value-adding offer to customers

� Focus on profitability and cash


Outlook

� Current market environment remains positive, a more

supportive cocoa products market and slightly improving

demand for chocolate

Mid-term guidance extended until 2018/19:

� Average volume growth 4-6%

� EBIT growth on average above volume growth1

1 in local currencies and barring any major unforeseen events

Outlook

Mid-term guidance confirmed and extended


January 2018

Appendix

� Global number one player in chocolate and cocoa

� Deep chocolate and cocoa expertise

� Global leader in Gourmet & Specialties

� Proven and long-term oriented strategy

� Unparalled global footprint, present in all key markets

� Preferred outsourcing and strategic partner

� Leader in Innovation

� Cost leadership along the value chain

� Pioneer in sustainability

� Entrepreneurial spirit

� Balancing short and long-term

What makes Barry Callebaut unique?


Chocolate confectionery market development – Nielsen data

North America (22% of market)

2012-17 average: 0.1%

2018 Q1: 0.3%

South America ( 7% of market)

2012-17 average: -1.2%

2018 Q1: 5.9%

Western Europe (33% of market)

2012-17 average: 0.0%

2018 Q1: 2.8%

EEMEA (24% of market)

2012-17 average: -0.6%

2018 Q1: 5.6%

Asia Pacific (14% of market)

2012-17 average: 4.4%

2018 Q1: 4.8%


Source, growth: Nielsen chocolate confectionery in volume – 25 countries, up to Oct/Nov 2017

Source regional market shares: Euromonitor

1.7%

1.3%

1.9%

2.8%

2.4%

5.1%

1.1%

Dairy

Breakfast Cereals

Sweet Biscuits

Cakes

Ice Cream

Pastries

Chocolate Confectionery

Our market and opportunities ahead

Global Chocolate confectionery volume growth vs cocoa bean price

-1000

-500

0

500

1000

1500

2000

2500

-2%

-1%

0%

1%

2%

3%

4%

5%

GB

P/t

on

ne

Vo

lum

e g

row

th

Chocolate Confectionery Cocoa bean price

Absolute volume

growth in tonnes

Forecast volume growth per application 2017-2022

% CAGR

2017-2022

(in tonnes)

Growing economies with still low chocolate consumption per capita


Sources: Euromonitor, IMF & Global Bank

USA

Euro area

Emerging

markets

Russia

China India

Brazil

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

0.0 2.0 4.0 6.0 8.0 10.0

Ch

oco

late

co

nsu

mp

tio

n p

er

cap

ita

in k

g.

GDP % growth 2017-2022

Chocolate and Cocoa markets

Barry Callebaut uniquely positioned in industrial chocolate and cocoa

markets

Cocoa grinding capacity Industrial chocolate – open market

Notes: Olam incl. ADM; Cargill incl. ADM chocolate business; Fuji Oil incl. Harald

Sources: Proprietary estimates


BC

Cargill

Blommer

Fuji Oil

Cémoi

Puratos

Clasen

Irca

Schokinag

Guittard

Others

BC

Cargill

Olam

Ecom Cocoa

Blommer

Guan Chong

Mondelez

BT Cocoa

Nestlé

JB Foods

Others

West Africa is the world’s largest cocoa producer

Source: ICCO estimates

� About 70% of total cocoa beans

come from West Africa

� BC processed ~900,000 tons or 23%

of the world crop

� Barry Callebaut has various cocoa

processing facilities in origin

countries*, in Europe and in the USA

Total world harvest (15/16): 3,989 TMT

Ivory Coast*

39%

Ghana*

21%

Indonesia*

8%

Ecuador

6%

Cameroon*

6%

Brazil*

3%

Nigeria

5%

others

12%


Successful year, delivering on our strategy

FY results 2016/17

Group performance(In CHF mio.)

FY 2016/17

(in CHF)

% vs prior year

(in CHF)

% vs prior year in

local currencies

Sales Volume Total (in tonnes) 1,914,311 +4.4%

Sales Revenue 6,805.2 +1.9% +1.2%

Gross Profit 986.7 +14.3% +14.6%

EBIT Total 488.2 +21.5% +22.3%

EBIT recurringEBIT per tonne recurring

470.1245.6

+17.0%+12.1%

+17.8%+12.9%

Net profit for the year 302.9 +38.3% +39.6%

Net profit recurring 284.8 +30.1% +31.3%

Free cash flow 475.6 +10.4% +10.9%


EBIT FY 2016/17

Strong operating profit up +21.5% including non-recurring, +17.0%

recurring

+18.1

+123.5

+10.2

+21.5%

+17.0%

EBIT

FY 2016/17

Additional

Gross Profit

-38.3

Additional

SG&A

401.7

-27.0

Restructuring &

other one-off

Other costs,

scope and

non-recurring

EBIT

FY 2016/17

comparable

470.1

EBIT

FY 2015/16

Non-recurring

488.2

EBIT

FY 2015/16

comparable

411.9

In CHF mio


EBITDA to Net Profit

Net Profit up +30.1% in CHF, as a result of strong profitability, lower

financial expenses and a stable tax rate

January 2018

In CHF mio

Tax rate:

17.4% vs

PY: 17.8%

219.0

Net Profit

FY 2015/16

Net Profit

recurring

FY 2016/17

284.8

One-off from

acquistiion

-18.1

Net Profit

FY 2016/17

302.9

Income

taxes

-63.6

638.1

+30.1%

-149.9

Depreciation

and

amortization

488.2

EBIT

FY 2016/17

-121.6

Net Financial

Expenses

EBITDA

FY 2016/17


Aug-17 Aug-16

Total Assets [CHF m] 5,534.1 5,640.8

Net Working Capital [CHF m] 1,129.5 1,374.2

Non-Current Assets [CHF m] 2,458.2 2,301.0

Net Debt [CHF m] 1,110.9 1,452.8

Shareholders' Equity [CHF m] 2,178.8 1,956.3

Debt/Equity ratio 51.0% 74.3%

Solvency ratio 39.4% 34.7%

Net debt / EBITDA recurring 1.8x 2.7x

Interest cover ratio 5.1x 4.0x

ROIC 11.5% 9.5%

ROE 13.1% 11.2%

Positive development of all key financial ratios

Balance Sheet & key ratios


Free Cash Flow

in CHF mio.

January 2018

Strong free cash flow, based on higher profitability, lower working capital,

stable interest and taxes paid, plus discipline on investments

620.0

539.4

+14.9%

FCF

+475.6

(PY +430.9)

Others

+23.2(PY +19.7)

Capex

-220.4(PY -201.0)

Interest

Paid and

Income Taxes

-139.8(PY -140.8)

Change in

Working Capital

+192.6(PY +210.3)

EBITDA recurring

FY 2016/17

EBITDA recurring

FY 2015/16


297

271279274

251

290

312

282

246

219242

223

256

286

282

231

1’795

2013/14

1’717

2012/13

1’536

2011/12 2016/172015/16

1’834

2014/15

1’379

2010/11

1’269

2009/10

1’210

1’914

Volume in kMT

EBIT per tonne in CHF

(as reported)

EBIT per tonne in CHF

(at constant currencies)

8-year EBIT per tonne development

Increase in EBIT per MT thanks to more favorable cocoa processing margin

and improvement of product and customer mix


Capital Expenditures

2017/18 E

240

2016/17

220

2015/16

201

2014/15

249

2013/14

249

2012/13

224

CAPEX as % of sales revenue+3.2%+3.0%+4.0%+4.2%+4.6%

in CHF mio.

Maintenance

Upgrade / efficiency gains

existing sites

IT

Additional growth

12 months – CAPEX


Significant headroom for further growth and raw material price

fluctuations

Available Funding Sources

CHF 4,131 mio

EUR 450 mio

2.375% Senior Notes

USD 400 mio

5.5% Senior Notes

CHF 1,507 mio

Outstanding amounts

-64%

Long -term

Cash & cash equivalents

EUR 250 mio

5.625% Senior Notes

ABSEUR 750 mio

Syndicated Bank Loan

(13 banks)

Various Bilateral LT Loans

EUR 600 mio

Domestic Commercial

Paper Programme

CHF 960 mio

Various uncommitted facilities

ABS

Short-termMaturity 2022

Maturity 2021

Maturity 2023

Maturity 2024

Committed lines

As of 31 August 2017


Liquidity – Debt maturity profile

507

375283

183

857

157

399

20212020

3

2019

3

2017Cash 2018 202420232022

Committed linesUncommitted lines

Bonds

Short-term facilities

Cash and revolving credit

facility (undrawn)

As of August 31, 2017

in CHF mio


roadshow presentation –q1 key sales figures 2017/18€¦ · outlook current market environment...

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